Cuomo signs MTA Payroll Tax reduction on LI

More than two years after its implementation, the MTA Payroll Tax has finally been eliminated for many small businesses across New York state.

Gov. Andrew Cuomo was in Nassau County today to sign a new law that will eliminate the 0.34 percent tax per employee for 71,969 businesses on Long Island, and reduce it for another 1,365.

The tax reduction was part of an omnibus bill passed by the state Legislature Wednesday that cut taxes for all families making under $2 million per year, and pumped millions of dollars into job creation. In total, 289,000 small businesses across the state with an annual payroll under $1.25 million will have the MTA tax eliminated. Businesses with a payroll between $1.25 million and $1.5 million will see their payroll tax cut to 0.11 percent, while those with payrolls up to $1.75 million will have their tax reduced to 0.23 percent. In addition, all elementary and secondary schools, public or private, will be exempt from the payroll tax.

The tax reduction and elimination will cost the MTA approximately $320 million, although the state has promised to compensate the public transportation authority for all revenue lost.

“Small businesses are New York’s growth engine and this tax reduction will help create jobs and get our state’s economy back on track without jeopardizing funding for the MTA,” Cuomo said.

The MTA Payroll Tax was wildly unpopular upon its implementation, especially on Long Island where the MTA provides only rail service to both counties. Nassau County’s bus service has been operated by the MTA for many years, although the agency plans to end its partnership with the county at the end of the year. The tax even cost Democratic state Sens. Craig Johnson and Brian X. Foley their seats in the 2010 election, as Republican Sens. Lee Zeldin, R-Shirley; and Jack Martins, R-Mineola, campaigned against the tax.

“The MTA Payroll Tax has been damaging our economy and restricting the growth of quality jobs in New York,” Zeldin said. “Repealing this tax for all small businesses and schools, and reducing the rate for others, spurs real economic development and helps put New York state on the path towards prosperity.”

Cuomo was in West Hempstead, with the area’s senator, Majority Leader Dean Skelos, R-Rockville Centre, another vocal opponent of the tax, for the bill signing.

“The MTA payroll tax has been an enormous burden on businesses and today we are lifting that burden,” Skelos said.